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Uber rake in half a billion dollars from questionable ride-safe surcharge

26 Aug 2019

 

A safe ride fee imposed by Uber in 2014 has been branded a "play for profit" by a New York Times reporter in his new book.

 

According to Mike Issacs, he states in his book Super Pumped:The Battle For Uber that the surcharge on all rides in the US was nothing more than a revenue-raising exercise to combat rising insurance and background check costs. None of the $500mn raised was ever earmarked to develop or enhance safety protocols.

Isaacs has claimed that safety features at the time amounted to nothing more than a video tutorial for Uber's drivers.

 

According to The Verge, safety features such as a button which connects directly to the emergency services wasn't added until a few years later.

 

Safe ride fees varied from city to city, with riders in Los Angeles paying an extra $1.65 on every journey, while those travelling in Philadelphia were paying $1.25 extra on a journey.

 

According to Uber, the fee was supposed to cover operational costs for its safety features, which included driver screening, incident response, and technology upgrades. Marketing of its safety initiatives was also thrown into the mix.

 

The premise behind having a separate charge was simple. Uber claimed that a separate fee was necessary to prevent it being affected by surge pricing, thus charging customers even more. 

 

However, in 2016, two class action lawsuits were filed against Uber in relation to the company's safety claims.

 

The allegation was that Uber improperly marketed its safety record to riders. As a result of the action, the tech giant settled out of court to the tune of $28.5mn. They also had to drop claims that it was the "safest ride on the road” and the “gold standard in safety" within their marketing.

 

They also had to change the "safe ride fee" to a "booking fee" as part of the settlement.

 

Mike Isaac's book is based on hundreds of interviews with current and former Uber employees.

 

Image Source: Pixabay

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